Government’s New Tax Break Rules for UK Developers Are Ridiculously Convoluted

What’s that old saying… If something seems too good to be true, it usually is. When the government first announced plans to offer UK games developers tax relief, the mood was positive, if a little cautious.

First mentioned by Chancellor George Osborne back in March, the idea was to help the UK become global leaders in videogames, animation and high-end television industries. However, in light of this week’s reveal, it seems the government is more interested in selling the UK as a tourist destination than helping it create truly ground-breaking digital experiences.

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The full list of requirements can be found by clicking to open the section below, it works on a point system in which developers must score at least 16 to qualify for tax relief. The only problem lies with how these points are awarded, in fact the only way I can think to describe it is: ridiculous.

[accordions] [accordion title=”The Cultural Test”]

(1) A video game may be certified as a British video game under section 1217CB(1) of the Act only if it passes the following cultural test.

(2) A video game passes the cultural test if it is awarded at least 16 points in total under paragraphs (3) to (6).

(3) Up to 16 points shall be awarded in respect of the content of the video game as follows—

(A) Up to 4 points depending on the percentage of the video game that is set in the following locations

(i) 4 points if at least 75% is set in the United Kingdom or another EEA state;

(ii) 3 points if at least 66% is set in the United Kingdom or another EEA state or set in an undetermined location;

(iii) 2 points if at least 50% is set in the United Kingdom or another EEA state or set in an undetermined location;

(iv) 1 point if at least 25% is set in the United Kingdom or another EEA state or set in an undetermined location;

(B) Up to 4 points depending on the number of the characters depicted in the video game with the following characteristics

(i) if there are more than three characters depicted in the video game, 4 points if two or three of the three lead characters are from the United Kingdom or another EEA state or from an undetermined location or, if only one of the three lead characters is from the United Kingdom or another EEA state or from an undetermined location, 2 points if that character is the first or second lead, 1 point if that character is the third lead;

(ii) if there are only three characters depicted in the video game, 4 points if two or three of them are from the United Kingdom or another EEA state or from an undetermined location or, if only one of them is from the United Kingdom or another EEA state or from an undetermined location, 2 points if that character is the first or second lead, 1 point if that character is the third lead;

(iii) if there are only two characters depicted in the video game, 4 points if both of them are from the United Kingdom or another EEA state or from an undetermined location, 2 points if one of them is;

(iv) if there is only one character depicted in the video game, 4 points if that character is from the United Kingdom or another EEA state or from an undetermined location;

(C) 4 points if the video game depicts a British story or a story which relates to an EEA state;

(D) up to 4 points depending on the percentage of the original dialogue that is recorded in the English language or in a recognised regional or minority language as follows

(i) 4 points for at least 75%; (ii) 3 points for at least 66%; (iii) 2 points for at least 50%;

(iv) 1 point for at least 25%.

(4) Up to 4 points may be awarded in respect of the contribution of the video game to the promotion, development and enhancement of British culture.

(5) Up to 3 points shall be awarded in respect of work carried out in the making of the video game as follows

(a) 2 points if at least 50% of the work carried out on any of the following is carried out in the United Kingdom

(i) conceptual development; (ii) layout and storyboarding;

(iii) programming;

(iv) visual design;

(b) 1 point if at least 50% of the work carried out on any of the following is carried out in the United Kingdom

(i) performing and recording the music score created for the video game;

(ii) voice recording;

(iii) audio production;

(iv) picture production.

(6) Up to 8 points shall be awarded in respect of the personnel involved in the making of the video game as follows

(a) 1 point if the project leader (or, if there is more than one, the main project leader) is a qualifying person;

(b) 1 point if at least one of the scriptwriters (or, if there are more than three, one of the three lead scriptwriters) is a qualifying person;

(c) 1 point if the composer (or, if there is more than one, the lead composer) is a qualifying person;

(d) 1 point if the artist (or, if there is more than one, the lead artist) is a qualifying person;

(e) 1 point if the programmer (or, if there is more than one, the lead programmer) is a qualifying person;

(f) 1 point if the designer (or, if there is more than one, the lead designer) is a qualifying person;

(g) 1 point if at least one of the heads of department is a qualifying person;

(h) 1 point if at least 50% of the development team are qualifying persons.

[/accordion] [/accordions]

Up to 4 points can be earned if the game takes place within the UK, with 4 more points on offer if most of the characters featured in the game are British. That’s 8 points, half the required total, for creating Eastenders: The Game – but what about non-narrative, even non-character driven games, where does this leave them?

The answer sadly is out in the cold, and that’s without even mentioning the other side of the coin, which incentivises developers to hire only UK personnel for certain roles. So irrespective of talent if a developer is not headed by British programmers, designers, and artists they aren’t eligible for a large number of points.

This proposed legislation has clearly been drafted up by someone with little to zero understanding of videogames as a medium, or the diverse and complex nature of the UK industry. For the few developers this will actually benefit it’s fantastic news but for the rest, it just feels likely to be a big disappointment.

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33 Comments

  1. Osborne strikes again. To me this list is a catastrophic waste of some poor civil servants time and our bloody money. It seems so unlikely that any globally distributed, profit making game will ever qualify for this tax break that the only exception could possibly have been the London 2012 game, and that was developed in Australia anyway. Lets all go and watch The Thick of It and dispense some Malcom Tucker style backlash.

    • Hardly the case, I’m happy to say.

      Assuming that quite a high percentage of the workforce in UK based game studios are also from the UK, you’ll likely get 7 or 8 of the points for lead personnel.

      Similarly, as long as the main body of the work is done in the UK, you get 3 of points from that.

      4 points for having “original text” in English? That’s just about all games ever.

      But I’ve been working backwards to get to the key point, that characters and location are largely or in part from the UK or “EEA”… Where “EEA” means “Europe”.

      So… Ezio Auditore and all those Italians in Assassin’s Creed 2, which is set in Italy, means that AC2 would get as many points as “Eastenders – The Game” for characters and setting.

  2. At least The Getaway 3 will finally come out lol! No in all seriousness I fucking hate this government

  3. How pathetic. Is this honestly how closed minded this government is? Tax breaks for UK games adverts. Feck off.

  4. I don’t think anyone in the government is a real person, that has lived a single day in the real world.

    • I have to completely agree here. They live in some fabricated reality. It’s ridiculous.

      • I shouldn’t get started on a rant, but the whole cheap alcohol thing was a joke – so because of a few people who drink excessively, I can’t take advantage of 3-for-2 drinks offers (that will sit in my fridge and be consumed over a reasonable period of time). What next, monitor fatties from buying too much cake? Unfortunately you can’t take away free will. Also, do they not think people who can no longer buy stupidly cheap booze just to get smashed, will not turn to drugs? Honestly, who thinks up some of these things.

      • Such low government revenues to be made from supermarket alcoholic Bogoff’s, they want be seen to curb the trend and ban it inciting health grounds, yet allow late night opening in bars and clubs to go ahead as that brings huge revenues for the government coffers whatever crime, health problems or depravity that might bring.
        Irony or hypocrisy?

      • Both. They seem to be trying to combat something they are at the same time enforcing. That seems to be a problem alot within government, they are fighting within themselves the majority of the time.

  5. Addendum:
    (7) Up to 20 points can be awarded if you refer to a UK Conservative Government in a positive manner
    (i) 4 points if you refer to and member of the cabinet in a positive manner
    (ii) 4 points for mentioning David Cameron by name in a positive manner
    (iii) 4 points for mentioning Margaret thatcher in a positive manner
    (iv) 4 points for referring to any Conservative politician past or present in a positive manner
    (v) 4 points for making the protaganist Blue and the antagonist Red or Yellow

    • Hey that’s good news for SEGA, now they can do a Sonic game set in britain where Eggman teams up with Nick Clegg and you get to play as David Cameron and go into his super form with the use of the UK Bullsh!t Emerelds.

      Yeah best Sonic game yet, please make it happen SEGA.

  6. Weston-Super-Mario Brothers?
    Pacmanchester?
    Frome Raider?

    The possibilities are endless!

    • They should genuinely make Eastenders: The Game. Make it a FPS, give me an LMG and let me mow down all of the populace. Can’t stand the show. DLC packs which add in other soaps too.

    • Weston Super Mario Bros!
      That is just genius

    • Tomb Raider is already very british but the Yankees ruined it starting with TR Legends onwards and the last straw for me was TR Underworld so I’m boycotting the reboot.

    • Also don’t forget the Rhyl Similator where dodging seagull poo is fun and you have to avoid Chavs, Hookers and Drugies, the best is it will fit in with governments desire to make Rhyl a tourist hotspot.

      also how about dodge the potholes where you errm dodge potholes in london or Rocksteady could make Bat Man Scouser City the most daring Bat Man game to date.

      • Correction
        “the best is it” should be “the best part of it is, that it”

      • And the very accurate British Rail simulator. Half of the trains are cancelled or very late, overpriced fares, leaves on the track means you have to cancell that train etc.. Or RyanAir simulator. :p

      • I guess those most likely to able to benefit are the indie guys, with games like The Unfinished Swansea, New-Castle Crashers or Welwyn Garden Velo-City

  7. So instead of actually offering uk based studios a tax break, they want to use them as a marketing campaign for the tourism. Because, people always play games to decide where they want to go on holiday whilst killing people. Plus, it could force developers to ruin their own ideas, such as Littlebigplanet 3 being set in London and Sackboy is a east end gangster.

    It’s just another half arsed idea from the tories in an attempt to gain some favour with the common folk due to how unpopular they are.

  8. Some silly, some common sense.

    Not enough emphasis (points) for work being done actually in the UK for me.
    A company can be headquarted here but work done by outsourcing overseas which misses half the point.

    Anyway, on the broader point of taxpayers subsiding a profitable (removing creative accounting from the equation) industry (if companies adapt efficiently to changing trends) people seem to think a Government has money… they don’t. They have taxation or borrowings (which is future taxation + interest), either way it costs you & me.

    Too many gaming companies take taxpayers money in other countries & still close down studios or leach the money overseas to avoid other taxes. Here there’s a much clearer path of benefits.

    Much better there be a process in place & to take a progressive point of view on it… these things can be enhanced & tweaked once they’re in place based, but on hard figures & benefits… Not the perceived benefits to whining fans.

    • The criteria seems suspect at times. Is there a chance that this is a copy & paste from the film industry as it talks about where “are set” which sounds weird seeing as we’re looking at a virtual world that potentially cannot be based anywhere on the planet! The next few items suffer the same lack of understanding. This smacks of a ‘CTRL + C’, ‘CTRL + V’ definitely!

      The rest makes good sense as it’s about more than just a tax break. It’s about investing in the country itself.

  9. is it just me that seems to thing this is reasonably good?

    it shouldn’t be to hard to get 16 points from that list, although i think there should be more of a focus on British developers then culture.

    also i’d love to see a few more British characters or locations in games, would make a change from the generic us/Russia/middle east.

    • Sadly when you into the real world implications there is an awful lot wrong with this.

      A quick example, the lead designer at a studio retires – a British guy/girl applies, as does a non Brit. Hiring the British person could potentially be the difference between making the tax break or not, and therefore be worth thousand of pounds.. who’s going to get the job, the best person or the most valuable?

      I’d like to know how Codemasters feel about these rules, seeing as racing games don’t really fit in with what’s been drawn up.

      I hope this is just a very very small step in the right direction, and eventually we will see action taken that really will encourage excellence from our UK devs.

      • Which point are you referring to with regards to the nationality of the job applicant?

      • in all honesty i’d support hiring the britsh developer, with the state of the economy at the moment I’m in favor of looking after our own interests before others

        also it’s quite naive to think people aren’t always hired on the value. although admittedly a lot of there value comes from there ability, employers will always take other things into the equation like connections, background, likability etc…

        and in my opinion at least the best person for the job IS always the most valuable.

  10. This government are a bunch of two hats…

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